Even before the cataclysmic events of the past year, policy makers in Japan were engaged in a quiet but high stakes debate about the country's future in the context of disquieting changes.
Japan's population is dropping, but the country is not so keen on immigrants to counter the decline. Looking beyond its borders, some of Japan's leaders have felt nostalgic for the simple rules of the Cold War. Global instabilities after 9-11, concerns about America's imperial overstretch and declining influence in Asia, and shifts in the global balance of power have left Japan contending with an increasingly volatile and complicated world. Relations between China and Japan have stabilized over the past few years, but Japanese leaders still wonder what kind of superpower China will become. And if the United States faces conflicts between its dealings with Japan and with China down the road, at what point will the Sino-American relationship take precedence?
Against this uncertain backdrop, the global financial crisis has had two effects of great consequence for Japan's deliberations on its future. First, it has accelerated changes in geopolitical influence away from Japan's traditional source of security and foreign policy, the United States, towards other, emerging centers of power. Second, it has transformed Japan's sense of disquiet into one of full-blown anxiety and crisis. Although there is enough suffering to go around these days, Japan's economy is especially hurting: with its domestic economy highly protected from imports and therefore less productive, the country is heavily export dependent for wealth creation. But its export markets have collapsed in spectacular fashion, and it cannot stimulate domestic demand. Japan's GDP is rapidly contracting, capital is flying out of the country, exports have dropped almost by half from a year earlier, and its Nikkei stock index is close to a 26-year low.
Japan's political leadership, meanwhile — already long seen as mediocre or incompetent by the Japanese public — has lost all credibility, both at home and abroad. In a recent article describing Japan's (now resigned) trade minister Shoichi Nakagawa at a G7 press conference as "incoherent, floundering, sleepy and confused," The Economist went on to say that the minister's demeanor "typified the country's economy and politics." The Liberal Democratic Party (LDP) — which has governed Japan since the 1950s (except for one brief interruption in 1993) — may finally be thrown out of office later this year. In a straightforward sense, an end to LDP hegemony is a good moment for democracy in Japan. The challenge is that its main rival, the Democratic Party of Japan (DPJ), is plagued by infighting and a lack of vision: in the absence of a comprehensive strategy, the DPJ may not be able to deliver much more than the LDP has done.
Clearly, Japan is in a moment of great consequence: whether one thinks of its population, its economy, its political leadership, or its ruminations on evolving geopolitical rivalries, the country has many important choices to make. So where should Japan go from here? Is the country destined simply to become, as Christian Caryl of Newsweek puts it, "the Hamlet of Asia, endlessly fretting about its waning world influence while failing to do much about it?" Does it have any option other than to retire quietly into the setting sun? And when it comes to Japan's triangulations with the United States and China, should Japan simply hope to "hug the US closer," or should it cultivate a stance neither too hot nor too cold towards the United States and China, like Goldilocks? Or should it seek from now on to "stand as a pole," in the phrase of Professor Terumasa Nakanishi of Kyoto University?
Late last week Prime Minister Aso gave one foolish answer. Emboldened, perhaps, by recent US-Japan meetings, the Prime Minister needlessly antagonized China by resurrecting a dormant dispute over uninhabited slands claimed by both China and Japan, and by insisting that the islands are protected under the US-Japan security alliance. At best, the gesture distracts from the problems Japan needs to solve; at worst, it could lead to a stand-off and an escalation.
In our book Japan's Open Future: an Agenda for Global Citizenship, my co-authors and I contend that if Japan wishes to escape a future of decline and irrelevance, and if it wants to take meaningful steps towards a more secure, contented and prosperous future, it needs to think big. Japan really has only one sustainable option: to become a more open, dynamic, conscientious, engaged, globally integrated country. In our book we show why this is so, and we offer a set of interconnected policy prescriptions for how Japan could undertake this radical transformation. There are many things Japan could do, but especially by moving beyond a rigid and inflexible conception of its national identity, by opening up to trade and immigration, by learning to communicate more effectively, including with the English language as the global lingua franca, and by undertaking a much more spirited commitment to global development and security, Japan has the potential to make a profound contribution to domestic, regional, and global challenges.
To pursue this path, however, Japan must think beyond isolationism and the US security alliance. Japan must begin to see itself as a global citizen and as an Asian country, and it must walk the walk on both counts.
At a time when multilateralism is imperiled, the United States would also benefit from such a radical shift in Japan's posture: it would find an expanded, wealthy market for its exports, a more secure Asian region, and a talented civil society capable of constructively contributing to global issues. President Obama understands that multilateralism is the only path forward for the world, and that its importance is even greater in dark economic times. As a grand strategy for Asia, therefore, President Obama should encourage Japan to pursue policies leading to a peaceful and integrated Asian community, one rooted in reasonably harmonious and dynamic relations between those (highly complementary) leading economies, Japan and China.
Now more than ever, the United States needs Asia to prosper, and Japan must play its part.